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Determine the cost of internal equity capital

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Reference no: EM131721781

The following financial information is available on Nicole Seamans Company:

Current per share market price$48.00
Current (t = 0) per share dividend$3.50
Expected long-term growth rate5.0%

Seamans can issue new common stock to net the company $44 per share. Determine the cost of internal equity capital using the dividend capitalization model approach. (Compute answer to the nearest 0.1%).

Reference no: EM131721781

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